When you need cash fast, but you can’t access a loan from a financial institution because you don’t have a great credit score, then a pawnshop is a wonderful alternative. You can get a loan by putting up some valuable belongings as collateral. This means that the pawnbroker will hold on to your items until you pay off your loan. However, are more than that. There is a retail aspect that is tied in.
For a lot of people pawnshops enable people to get quality, second-hand items at low prices. This means that customers who use pawnshops to get access to money have two options: pawning or selling.
You need to think about whether you want to part with your valuable items or not. If you are simply looking for a loan that you know you can repay within the specified time frame so you can get your valuables back then you should pawn.
When you sell your valuables to a pawn shop you effectively relinquish ownership when you and the broker agree on the price and you leave the premises with cash in hand.
Before considering whether you should pawn an item or sell it, you need to consider its personal value. Family heirlooms are irreplaceable, so if you have something that is particularly significant to you then you might want hold on to it by pawning.
In addition to that, you should consider the value of what you have at hand. A Rolex watch, for example, is expensive. You may get a loan for a substantial amount of money. However, the value of a Rolex watch appreciates over time. If you pawn the watch it remains yours and as long as you are able to pay the loan back with interest, you can pawn the same watch again when you need cash.
The Pros of Pawning
Pawnbrokers accept items like gold jewellery, luxury brand watches, TVs, computers, laptops, smartphones, video gaming consoles and others accept guns too.
When you pawn your items, you can get them back as long as you repay the loan.
Pawnbrokers do not factor in your credit score into the transaction. They do not check your credit score nor will they report you to any credit bureau, so if you default, then your broker will take ownership of your valuables.
Unlike other traditional financial institutions, the process of obtaining a loan from Melbourne pawnbrokers is quick and easy. You don’t have to wait days on end to get the money you need. It’s quick and easy.
Cons of Pawning
While you can get your items back when you pawn, there aren’t any guarantees that you will get them back.
Your pawnbroker will give you a payment schedule to help you keep track of your repayment. You can renew the loan if you need more time. You can even extend the repayment period, but be prepared to pay higher interest rates.
The other option that pawnbrokers have is to sell your items for cash. This means you relinquish ownership to a broker who can then sell it to the public for profit
Pros of selling
The main benefit is that you can get a higher value for your items. For instance a $1000 watch might get you a $300 loan. If you sold the watch you may get $800 cash, hassle free.
Selling also gives you a chance to get rid of things that you don’t need anymore so you can make space for new ones.
When you sell you don’t have to worry about repayments and interest rates.
Cons of Selling
When you sell items at a pawnshop, you relinquish ownership of the items. You can never get the items back. This means you cannot rely on the same item should you find yourself needing cash in future.
Pawnshops are convenient, easy to use alternative sources of cash. Before you take your valuables to Melbourne Pawnbrokers, you should consider whether pawning or selling is best for you.